Bulletin: NY000036

Date:
March 26, 1993
To:
All Underwritten Companies
RE:
Claims Prevention 1) Identification of Parties and 2) Mortgage Satisfactions

Dear Associates:

In the last few years we have seen an increase in the number of fraud and forgery related claims. In order to try and contain these problems, it is important to remind all of your personnel, in particular readers, clearance people and closers, that we have to be alert and aware of certain situations.

At all closings, proper identification must be submitted by all parties. When an attorney is present, we can rely to a degree on the attorney's representations that the parties are who they appear to be. However, recently many attorneys have not met their clients prior to the closing and in some situations, the parties are not represented by counsel. In these situations we must be even more concerned with proper identification. Stewart Title Insurance Company requires that the following forms of identification be submitted and reviewed at the closing whether the parties are represented by counsel or not:

1.Valid New York State driver's license or Non-driver's license;

2. Current utility bill from the subject premises;

3. Second form of picture identification; and

4. Unexpired major credit card.

Although these requirements may appear burdensome, the result of improper identification or a fraud being perpetrated against the company requires that we be very careful. In situations when there is no attorney present, closers are to be extra careful in reviewing proper forms of identification and being alert for factors which cast any doubt whatsoever on the identity of the parties. Closers should not be afraid to either inquire further as to a person's identity or to adjourn a closing when they feel a problem may exist.

Another situation which has arisen with some frequency involves forged Satisfactions of Mortgage in the chain of title. Please have all office personnel and examiners be alert to any mortgages which have been satisfied in the chain of title without having another mortgage simultaneously recorded. This situation raises the possibility of a fraudulent satisfaction, especially if mortgages have been satisfied within the last year prior to closing or if a private mortgage is satisfied of record. We should all be alert to a possible fraud. Many times all that is required is an explanation of the transaction. However, we should all be alert to these situations and make the extra effort necessary.

Upon reading this bulletin, please inform all examiners, readers, closers and other key personnel of your operations. Stewart Title Insurance Company will require that proper procedures be followed in these situations. Hopefully, with all your help, we will be able to minimize the problems which are occurring in our industry. As always, if there are any questions as to these or other situations, please contact our office for counsel.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
6.36 Forgeries
 
6.38 Fraud
Exceptions Manual:
None
Forms:
None